NETWORK STRATEGIES
Headline
Middle East to middle England: Fujitsu and Etisalat outline ambitious plans
In more affluent countries in the Middle East operators are completing some ambitious terrestrial fibre projects. Etisalat last month claimed to be the first operator globally to link the entire population of a capital city, Abu Dhabi in the United Arab Emirates, with fibre. The company says some 1.125 million households in the capital have been connected to the FTTx network. According to Telegeography, Etisalat has deployed a total of 2.8 million kilometres of
fibre across the UAE and expects to complete rollout by the end of 2011, making it the first country in the world entirely covered with a fibre-optic network. Telegeography says the network, dubbed ‘e-Life’, was launched in December 2009, with triple-play packages bundling voice, broadband and IPTV following in May 2010. Etisalat has invested AED7 billion (about E1.3 billion) in the network, and plans to invest the same amount again over the next three years. In Qatar operator Qtel has installed over 500 kilometres of fibre and plans to migrate customers to the network from the middle of this year. Qtel is planning to take the fibre network nationwide, and has earmarked 600 million Qatari Riyals (about E110 million) for the first phase of the project according to reports, to deliver services up to 100 Mbps. Meanwhile in more developed markets, last month marked two announcements that show it is not just telcos which are upping the ante for fibre rollout. Fujitsu said it will invest up to £2 billion to build a wholesale fibre network in the UK—it hopes to get some of the government’s £530 million broadband fund—to provide services at speeds up to 1 Gigabit- per-second to rural areas. Futijsu, which has deployed fibre networks in other countries including Japan and Saudi Arabia, says Virgin Media and TalkTalk will be among operators delivering services using the network. And in the US, Google last month announced that it has selected Kansas City in which to build a fibre network to deliver services up to 1 Gbps from 2012. If the builds go ahead, both networks will greatly exceed the service speed targets set by the respective governments.
investment. “Sometimes the government will contribute US$25 million and the private sector will invest two or three times that,” says Gallegos. “It is less formal than that, but we see it happening.” According to World Bank studies, if
governments can stimulate infrastruc- ture investment they can hope to see payoffs in the form of considerable economic growth. “In the case of broad- band penetration, 10% growth is associated with one and a half percentage points of GDP growth,” says Gallegos. The Kenyan economy, for example, is
likely to expand 5.3% in 2011, spurred by investment and competition in the ICT sector, according to a World Bank report. “[Kenya] could develop into a regional hub of IT innovations and IT-enabled services due to its cost advantages, invest- ment in enabling infrastructure including fibre optic cables and a well-educated and urbanized labour force,” it says. Privately-owned operators also see a
potential financial benefit from linking to the subsea cables that are going into operation around Africa’s coastline (Total Telecom Plus, February). Hamilton Research says the 13 submarine cable systems with landings in sub-Saharan
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Africa have a total design capacity of 14.0 Terabits per second, and that will almost double to 25.8 Tbps by the end of 2012. “The undersea cable operators and
domestic network operators have a lot at stake in incurring good returns. They can’t sit and wait and let cables go unused,” says Kerem Arsal, Africa and Middle East analyst at Pyramid Research. Two of Africa’s largest wholesale companies, Gateway
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Communications and Kenya Data Networks, have already laid terrestrial fibre networks to link to the subsea cables lit on the east coast of Africa. This year Gateway will lay terrestrial fibre to prepare for the availability of the WACS subsea cable network, which landed in South Africa in April and is expected to be commercially available in early 2012. WACS is funded by operators including Telkom, Vodacom and MTN, and will be the first subsea cable to link countries on Africa’s west coast to Europe. In addition to providing new fixed
consumer and business services, many mobile operators in the region are invest- ing in both subsea and terrestrial fibre in order to reduce their backhaul costs as they move to offer higher-speed data
services over 3G networks. “Even invest- ment in LTE [networks] can only be effective if there is fibre optic backhaul,” points out Gallegos. In the six months to September 2010,
for example, mobile operator Vodacom South Africa laid some 831 kilometres of fibre nationally. In April this year Vodacom announced a 43.2-Mbps network in urban areas of South Africa, which amounted to a doubling of previ- ous speeds. Yet there are concerns that investment
in terrestrial fibre along Africa’s coast- line will lead to the continent’s landlocked nations being left behind. As a result the World Bank and the African Development Bank (AFDB) have co-financed the construction of the Central African Backbone network, the first phase of which began in October 2009 with approximately US$30 million in financ- ing for infrastructure in Cameroon, Chad and the Central African Republic. According to the World Bank there will be multiple phases involving up to 30 countries eventually, with phase two providing up to US$130 million in addi- tional financing. In another landlocked country, Rwanda,
the country’s development agency earlier this year announced the completion of a 2,300-kilometre national fibre optic cable to connect to subsea cables in East Africa through links in Kenya, Uganda and Tanzania, at a cost of US$95 million. The Rwandan government hopes the new infrastructure will boost access to broad- band services including electronic banking, learning and health, and attract companies looking to outsource opera- tions. The network operates on an open access model, and the government hopes eventually to transfer the infrastructure into private ownership. Currently, only about 12% of the population has access to the Internet. In January, the World Bank approved
another infrastructure project for West Africa, which initially will provide funding of US$56.6 million to improve broadband networks in Sierra Leone and Liberia, including fibre optic links to subsea cable networks. Funding for the
www.totaltele.com May 2011
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